‘Retail in Oman is under-serviced’

Dubai-based Wayne Scherger, Vice President (Divisional Services), MAF Shopping Malls, was in Muscat in September for the opening of the RO22.5 million expansion of Muscat City Centre, owned by MAF Shopping Malls. He talked at length with Akshay Bhatnagar and Susmita De about the changing dynamics of the Omani retail sector and the growth strategy of MAF Shopping Malls, part of Majid Al Futtaim Group.

How do you look at Oman’s retail market?
I think it has changed quite a lot in the last several years and it is continuing to change. When Muscat City Centre (MCC) entered this market in October 2001, it was relatively an unknown entity. When we first opened, we really had to do a lot of convincing to get some of the international brands to come.

When we first opened, it took about a year-and-a-half and then it really gained a solid footing. To make our presence known, we researched very well about the local market. The brands and the retail groups initially came because we saw their potential in Oman. We saw that a growing segment of the market is absolutely young.

What is your strategy for expansion in Oman?
We have another project, Qurm City Centre (QCC), that will again be anchored by Carrefour. It will be smaller than the Muscat City Centre. In all the markets we are in or we want to be in, to see what the actual potential is we are actively doing our analysis based on the success of Muscat City Centre, the economic indicators, population growth and the retail span. We feel that Oman is the market we want to continue to invest in.

Can you tell us more about QCC?
The foundation work is happening now. We are going to make a formal announcement on QCC soon.

Will it not impact your business in Muscat City Centre?
Any new retail in the market is going to have some impact on other retailers. We feel that Oman, specifically the Muscat market, is growing at a fascinating rate and going to absorb more retail. For example, in North America, the average retail space per capita in the market is almost 20 sq ft.

In Dubai, the average is about 5 to 5.4 sq ft. Compared to Oman, Dubai is a different market as there is a larger floating population due to influx of tourists…

But in Oman the average retail space per capita is 1.3 sq ft. Oman is under-serviced as far as retail is concerned. There is a potential for other shops as well. In Qurm, although QCC will change the market to a degree and change the shopping pattern too, we don’t feel it is going to have major impact on the viability of Muscat City Centre. I think it will be complementary; it will solidify our position in the market.

Are you not considering other locations also, like Salalah, Sohar and other places?
We are analysing the potential in every segment of the Omani market. We have no definite plan now but there is an opportunity and we are going to make future investments in Oman. At this point, nothing else can be announced.

Do you have any plans for The Wave, Muscat project in which your parent group has substantial stake?
That is definitely something that seeks our attention.

Back to MCC, what is stopping you from increasing the leisure and entertainment element?
At this point, the MCC has a restriction. We don’t have the space for it. In our Dubai-based site, leisure and entertainment are an integral part of the shopping centre experience.

What kind of footfall growth are you expecting now from MCC?
We see a very strong growth rate in footfalls. During expansion, our footfalls had softened but the sales had increased. So we not only expect our footfalls to increase but the average spending of customer is also going to increase.
 

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